An Expanding Judicial Precedent … Court of Appeal Calculates the Entitlements of a Worker Arbitrarily Dismissed by Al-hennawy based on the Statutory Minimum Wage

The Damanhour Court of Appeal, Labor Circuit No. (27), ruled in Appeal No. (2692) of Judicial Year 81 to amend the judgment issued by the court of first instance and to calculate the financial entitlements of a female worker employed by Al-hennawy Tobacco and Molasses Company on the basis of the statutory minimum wage prescribed by law, after establishing that she had been subjected to arbitrary dismissal and that the company had failed to apply minimum-wage decisions throughout the entire duration of her employment.

Pursuant to the ruling, the court ordered the company to pay an amount of EGP 183,000 as compensation for the arbitrary termination of the employment relationship, following the recalculation of the worker’s financial entitlements on the basis of the wage legally due, rather than the actual wage she had been receiving in violation of the law. The ruling also included an adjustment of the compensation due for her accrued annual leave balance.

The judgment constitutes an extension of a judicial precedent that has begun to crystallize in previous rulings issued against the same company, which affirmed that compensation in cases of arbitrary dismissal must be calculated on the basis of the minimum wage, as it represents the minimum level of rights guaranteed by law to workers, rather than on the basis of reduced wages imposed by employers in contravention of labor legislation.

The new appellate ruling increases the number of judgments issued in favor of female workers at the Al-hennawy  factory to eleven (11) out of a total of twenty-nine (29) arbitrary-dismissal claims, while other cases remain pending before the labor courts, in what constitutes one of the largest collective dismissal cases witnessed by the sector in recent years.

The facts of the cases date back to the company management’s decision to relocate the workplace from the city of Damanhour to the Borg El-Arab area. This decision imposed substantial additional burdens on the female workers due to the distance involved and the difficulty of commuting. Subsequently, management barred those who objected to the decision from entering the workplace—conduct that the courts deemed to constitute arbitrary dismissal in violation of the provisions of the Labor Law.

On 27 July 2025, the North Damanhour Court of First Instance ruled that the company must compensate six female workers with more than EGP 1 million for arbitrary dismissal, the statutory notice period, and accrued leave balances, together with statutory interest at a rate of 4%. One of those judgments established a judicial precedent by recalculating a worker’s wage in accordance with the minimum wage applicable at the time of her dismissal.

The female workers are legally represented by the Egyptian Center for Economic and Social Rights, in cooperation with Al-Shawarby Law Firm. In all cases, the defense maintained that rights and compensation must be calculated on the basis of the minimum wage and that exemption requests invoked by certain employers to evade their legal obligations should not be recognized.

The Center affirms that the latest appellate ruling reinforces a fair judicial trend in support of workers’ rights and provides legal protection against circumvention of the minimum wage in cases of arbitrary dismissal, particularly in light of delays in forming the committees competent to review exemption requests. The Center further calls for the consistent adoption of this approach across labor courts.